Transport and the Supply Chain Introduction Transportation is the movement of goods and services from one place to another whereas the supply chain is the individuals, organizations, resources, and technologies that enable the movement of the company's products. Transport is one of the vital components of the supply chain of an organization; in business, it facilitates the flow of goods from the location where they are produced to the place where the customers require them. It, therefore, provides a link between the business and its customers. It thus plays a significant role in the success of a business. In essence, there is a strong relationship between transport and the supply chain of an organization.
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The Role of a Transport System A transport system is considered to be efficient based on factors such as the delivery speed, time, cost, service quality and the facilities used in the process of moving goods from one location to another. Transportation is a necessity in business because without the movement of goods and services, trade is not possible (Jain, & Dangayach, & Agarwal, & Banerjee, 2018). A good transport system facilitates supply chain efficiency by reducing operational costs and management time and improving the quality of the services offered by the firm. Transportation is crucial to the supply chain process because it enables the conversion of resources from its raw stage into the final product and finally enables the end product to reach the consumer. The role that transportation plays in supply chain management involves more than just carrying goods from one place to another; it is a complex process that requires adequate management techniques. A well-managed transport system makes it possible for products to reach customers at the right time, in the proper condition in order to satisfy customers’ demands effectively. Transportation is crucial to the overall performance of the company and its ability to maintain its competitiveness. Supply Chain Management Goods and services are usually not consumed at the time and place as they are produced. There is often a series of steps that enable suppliers to deliver products to end users at a time, place and in a manner of their convenience. Supply Chain Management (SCM) is the processes involved in unifying the resources within and outside business to create a customer-focused and innovative supply system. The three main activities of a supply chain are purchase, manufacture, and transport. Supply chain management also involves the
decision on the materials to use to develop a product, production quantities, optimal stock levels, the distribution network and the most efficient and economical form of transport to use. Logistics management is an integral aspect of supply chain management. It determines how and where the company gets its raw materials, where they are manufactures and how the finished product is eventually delivered to the end user. Developing an effective and costefficient logistics network provides a significant competitive advantage for the business. The organization creates an effective cost efficient logistics network through assessing its transportation system and making changes where necessary to make it relevant and responsive to the company's needs and economical (Bempong, 2018). The key indicator of a responsive transport system is its network visibility. Each point of the transport system should be observable and thus easy to correct when necessary. Due to this visibility, any anomalies in a responsive transport system are easy to detect and correct. A cost-effective transport system occurs as a result of embracing technology and adapting to changes in logistical operations promptly. Logistics and Transport The concept of logistics began to advance in the mid 20th century after World War II due to the increase in international trade. Due to the rise in globalization, it has become increasingly necessary for businesses to develop production and distribution processes that facilitate their competitiveness on a global scale. The link between all the activities involved in supply chain management and logistics is a transport system (Su, Lim, & Ke, 2011). At all stages of the supply chain, from manufacturing to delivery, transportation is essential. It is,
therefore, necessary for the business to create transport and supply chain systems that lower the business’ expenses and maximize the benefits. Ideally, for a logistics system to qualify as being effective, it should anticipate clients’ needs, develop products and services that meet this needs and deliver them in a timely way and a location of their convenience. In this process, a transport system facilitates the movement of raw materials to the industries, finished goods to the warehouse and ready-tosell packaged goods to the customers Transportation Management Transportation management is an aspect of the supply chain management that is primarily concerned with planning. Coordinating and executing the movement of goods from one location to another; it deals primarily with the logistical aspect of supply chain management. The objective of transportation management is to enhance shipment efficiency, lower the costs of transportation and improve the quality of customer service. As businesses become global and operate on a larger scale, transport management has become one of the most essential tools for conducting business effectively (Tseng, Yue, & Taylor, 2005). Effective transport management allows the business to operate by allowing the seamless exchange of information across various supply chain partners and the transfer of goods across different geographical regions. Transport management applies to organizations that have complex logistical requirements as well as organizations that have more straightforward transportation requirements. As businesses continue to grow and expand into different geographical regions as a result of globalization, there will be a greater need for transportation management.
Effective transport management helps to develop the other elements of the supply chain such as purchasing, storage, customer relationship, and supplier relationship management. Transport management enables a business to keep track of its product's lifecycle which in turn leads to more accurate budgeting and forecasting. Modes of Transport In supply chain management, transport modes carry both passengers, cargo or a combination of both. There are four main modes of transport; road, rail, sea, and air. When selecting the most appropriate method of transportation for a business, it is crucial to consider the type of products that require transportation; are they perishable or non-perishable, are they light or bulky? (Gattorna, & Walters, 1996). It is also important to consider the length of the distance that the commodities are required to travel and the time by which the goods are required at the other destination. The choice of a mode of transportation is also influenced by the costs and the handling requirements of the materials being ferried. The business should select the transport mode that suits its needs and budget best. Road Transport Road transport is the oldest mode of transportation, and many businesses prefer it because it enables the easy movement of a large quantity of goods along a long distance at a relatively lower cost than other forms of transport. It is a flexible mode of transportation since it allows products to be loaded and unloaded at various destinations as well as door-to-door delivery. For road transport to be most effective, it requires adequately developed transport infrastructures such as tarmacked roads and bridges. Historically, before vehicles were invented, road transport was non-motorized and involved walking, cycling, and animal carriages. However, from the 20th century onwards, road transportation in supply chain
management is carried out through motorized forms of transport (Tan, Lyman, & Wisner, 2002). Whereas in the early 20th century only small batches of goods could be transported, containerization has made it possible to ferry large quantities of products over long or short distances. One of the main limitations of road transport is that it is dependent on the infrastructural development and physiography of an area. For instance, efficient road transportation might be hindered by rough terrain, rivers, and mountains. Road transportation may also be considered to be expensive due to the high maintenance costs of the vehicles and infrastructures used. Additionally, road transportation may not be appropriate for carrying perishable or urgently required goods over a long distance. Rail Transportation Rail transport involves the conveyance of passengers and goods along specially designed railway tracks or railroads. Rail transport is often cheaper than the other modes of transport and can be used to carry bulky goods over long distances. It is a reliable means of transportation because trains maintain a consistent schedule; additionally, rail transport is not affected by adverse weather conditions unlike most of the other modes of transportation. However, despite these merits, the key disadvantages of rail transport are that it is inflexible and it requires massive infrastructural investment by the government and may therefore not be available in certain areas. Pipeline Pipelines facilitate the fast and easy transportation of gas and oil. They are the most efficient mode of transportation for these commodities because they can be laid on land or underwater, therefore, this mode of transport is not hindered by physiographic factors.
Pipeline transportation is expensive to construct and is often prone to vandalism. It is also unable to transport a number of materials. Maritime Transportation Maritime transportation is often used to ferry large quantities of goods over a long distance at a more affordable cost than air transport. The primary means of maritime transportation are seas, oceans, lakes, rivers, and channels. The main disadvantages of maritime transportation are; it requires a country to have access to a water body and therefore is not possible for countries that are landlocked (Beamon, 1999). It also involves port infrastructures such as docking stations and ports, which are expensive to construct and maintain. Additionally, maritime transportation is heavily affected by harsh weather conditions and sometimes travel has to be rescheduled due to this. Air Transportation Air transport is the fastest and most effective mode of transportation. It is the best means of transport for highly perishable goods such as agricultural products and certain medication. Unlike the other modes of transportation, air transport is not affected by geographical features such as mountains and rough terrain. It is also a relatively secure mode of transportation and may be best for the safe handling of delicate materials. The main demerits of air transport are its high cost and its low capacity to carry bulky goods. Constructing and maintaining the infrastructure necessary for air transport such as runways and airports is also very costly. The Relationship Between Transportation and Supply Chain Management . Without a transport system, the supply chain management process would not be possible. Selecting the right transport system facilitates better service quality, improved
logistical efficiency and reduced operation expenses. Both the private and public sectors develop transport systems; a well-developed transport system promotes the growth of businesses and the economy. The Role of Transport Costs in SCM The transport system is a crucial driver of business success because it might either enhance or hinder the organization's ability to move its goods from one destination to another in the performance of its business activities. In the supply chain management cycle, the most significant proportion of an organization's resources is spent on transportation. The cost of transportation is quantified in terms of; the cost of acquiring the means of transportation, labor, containers, terminals and time. The quality of a transport system affects the overall performance of a business. For instance, poor roads might lead to challenges in delivering materials from the farm to the factory, which might lead to losses. Additionally, the lack of access to a maritime body may force the business to use air transport which is relatively expensive, therefore reducing the profits of the business (Pinon, Fry, & Clarke, 2009). Supply chain managers must consequently understand the different transport options available to the company and the merits and demerits of each, to enhance the performance of the business. The choice of the transportation option to use is dependent on features such as its value, weight, perishability, the urgency of customer demand and the cost. Transportation has a significant bearing on the profitability of a business, and it should, therefore, be optimized to ensure that it adds value. How Transport Affect the Supply Chain In business, for a transport system to be considered effective, it must meet two basic requirements; firstly, the transport infrastructure should be well-developed and in good
condition, and the costs involved in transporting the materials must be reasonable. The mode of transport determines the quantity of goods that are produced, warehoused and marketed. It also determines the location of the business’ facilities; to reduce high transport costs, most businesses locate their premises near airports, seaports and major highways (Singh, Singh, & Bhardwaj, 2011). In today's competitive business environment, transportation plays a more significant role than merely the transfer of goods from one point to another; it is also a source of competitive effectiveness. Conclusion As businesses continue to globalize, the production strategies have changed significantly. Raw materials may be produced in one country, exported to a different country for manufacturing and then exported to customers across the world. This trend is particularly common in the fashion, information technology, and agricultural products industries. The role of transportation in supply chain management will therefore continually become more significant. The government should assist the private sector become internationally competitive by developing, maintaining and improving transport infrastructure to help businesses improve their transport efficiency and reduce costs. Transportation and supply chain management have an interdependent relationship, where the improvement of transportation ultimately improves the performance of the supply chain, and enhances the productivity and productivity of a business. References Beamon, B.M. (1999) "Measuring supply chain performance", International Journal of Operations & Production Management, Vol. 19 Issue: 3, pp.275-292, https://doi.org/10.1108/01443579910249714
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